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GHEI: A food fight over food trucks

Proposed rules would sideswipe epicurean entrepreneurs

- - Thursday, May 9, 2013

The battle to regulate upstart food-truck entrepreneurs in Washington might be coming to a head. The D.C. Council's Committee on Business, Consumer and Regulatory Affairs is scheduled to hold a public round table to finalize the regulations under which food trucks can operate in the District. If the rules are implemented in their current form, hungry residents will have far fewer options for lunch and small businesses will starve. Regulations that address public health, food safety and traffic flow concerns serve a clear public purpose. In this case, the proposed regulations fail on all of these grounds.

Regulators have viewed the burgeoning food-truck industry with suspicion virtually from its inception. Rules to restrict the operation of food trucks were proposed as long ago as 2010; the current version is the fourth iteration. An extraordinary degree of obscurity and lack of definition render the rules unfriendly to food trucks. The inclusion of a formal lottery to secure a vending spot permit should be a tip-off that the proposal is problematic.

The proposed regulation lays out 23 potential mobile-vending zones throughout the city, and there would be at least three spots for food trucks in each zone. These zones are not equally attractive for those selling food, but merely areas that regulators have deemed appropriate for vending. Vendors, not regulators, are in the best positions to know where their customers are to be found and, therefore, which zones are viable and which are simply regulatory constructs. Farragut Square and L'Enfant Plaza, for example, are prime spots for selling food; St. Elizabeths Hospital and Friendship Heights, far less so. The fundamental decision of where to vend should rest with the food-truck operator, not the regulators. The city's concern should be limited to congestion and traffic flow, both vehicular and pedestrian.

A related problem is that the minimum number of permits might prove to be the maximum. Any number above three would be entirely at the government's discretion — an uncomfortable thought for an entrepreneur putting resources into the always-risky food business. Assuming three permits per zone, this could limit the number of food trucks to as few as 69. Those not fortunate enough to secure a permit would be subject to additional restrictions. They would not be allowed to park closer than 500 feet to the edge of the vending zone, and then only in a spot with 10 feet of unobstructed sidewalk — vanishingly rare in downtown Washington.

Spreading the food trucks around the District might be intended to fix traffic problems, but it is not clear that there are problems. An experiment by the public interest law firm Institute for Justice found that the presence of food trucks increased the pedestrian time to travel a block in Federal Center and in Dupont Circle by a mere one second.

The unintended — but entirely foreseeable — consequence of this forcible thinning of food trucks will be the loss of the network effect that drives the growth of the food-truck industry, the equivalent of the benefits of knowledge spillovers in Silicon Valley or of the pooling of talent in Hollywood. A wide variety encourages more people to try the food trucks; limiting variety will limit choice and demand, squeezing sellers out of the District or out of the industry entirely.

The cherry on top this unappetizing regulatory sundae is the formal institution of a lottery. Under no circumstances should the word lottery appear in a regulation, particularly one pertaining to business. The D.C. Council proposes to require vendors to pay a $25 fee per vehicle to enter a monthly lottery for a spot. Those lucky enough to secure a spot would have to pay an additional $150 for a monthly parking permit — for the privilege of vending between the hours of 10:30 a.m. and 2:30 p.m. The losers, stuck with the 500-foot and 10-foot location restrictions, almost certainly will be pushed out of highly desirable locations such as Farragut Square. The lottery adds an unacceptable degree of uncertainty to the business of food trucks. Regulation should attempt to reduce uncertainty, not increase it.

The proposed regulations do not benefit consumers; they reduce the food options available. They do not help the food-truck vendors; quite the reverse. They lack any clear traffic benefits. If the council wishes to regulate the food-truck industry, we would all be better off if the regulations were clear and narrowly tailored to achieve articulated outcomes. While not perfect, the regulations in place in Los Angeles, home of a long-established and thriving food-truck industry, might be the place to start.

Nita Ghei is a contributing Opinion writer for The Washington Times and policy research editor at the Mercatus Center.